7 Property Market Predictions for Scotland as of 2024

April 16, 2024

Property

Scotland’s real estate market has suffered since 2020, yet, as 2023 showed us, there is a light at the end of the tunnel. Mortgage interest rates have hit shockingly high numbers, affecting the housing and rental markets badly.

With steadily growing demand for housing and a slow increase in post-COVID tourism, the market is becoming more stable. Whether you’re a buyer, landlord, renter, or seller, will 2024 be the year to make your next big move? So, for today’s article, we’ll make some real estate market predictions for 2024. Let’s dive right in…

Property Predictions for Scotland in 2024

Before we jump into the predictions, we should point out that there are loads of scam property websites out there. When you browse Scottish property online, make sure you use a VPN at all times. To find out what a VPN is and how it works, follow the link.

House Prices Steadily Increasing

After a rather stubborn 2023, March 2024 is seeing its highest house price increase in 10 months. Rightmove reported that newly marketed properties were seeing a 1.5% price bump on average.

With increased demand and buyer activity returning to pre-pandemic levels, many are jumping on this opportunity to sell. However, with sky-high mortgage rates, the market is skewed towards investors and those less affected by high interest rates.

Rental Inflation is Still on the Rise

The renter’s market is still seeing inflation and fierce competition. As of February 2024, average rent had seen a 10.9% increase compared to a year earlier. Expect even higher rental increases in more competitive areas of Edinburgh and Glasgow.

Increased interest in shared properties is to be expected, as renters are squeezed by the cost-of-living crunch. Areas of Lothian and Greater Glasgow have seen rental increases of all property types higher than the rate of inflation.

With the Rent Cap Gone, Expect Price Hikes

Becoming an Act in October 2022, the Cost of Living (Tenant Protection) Scotland Bill introduced temporary caps on rental increases. This bill protected tenants from major rent hikes and evictions in a time of crisis but was lifted on the 31st of March 2024.

Continuing from April, we can expect:

Medium to large rent hikes (especially in more competitive areas);
Widespread evictions by landlords;
Challenges to rent increases through Rent Service Scotland (RSS);
Possible increases in homelessness and poverty.

Higher Demand for Rural Property Options

Especially with the lack of a rental control bill, it’s unsurprising that many renters and buyers are turning their eyes away from rental hotspots. Outer-city and rural properties will likely see increased demand and interest as rents increase in the cities.

Property in Galloway, Argyll and Bute, and the Ayrshires has seen rent increases, but lower than the rate of inflation. In general, interest in rural property has increased post-COVID, possibly from a demand for open spaces and natural surroundings.

Consistent Competition in Desirable Locations

Meanwhile, in the heart of Edinburgh, Lothian, Fife and Dundee, rental as well as buying prices are rising above inflation. Without the rent cap, tenants in these areas are frequently priced out of their properties.

Good deals can still be found throughout, but you can expect a longer wait for quality and affordable options. As a buyer, average housing prices are increasing slower than the national average in areas like West Lothian.

Source: Artur Kraft

Availability in Tourism Centres to Dwindle

As urban revitalisation carries on and tourism begins to rise to pre-COVID levels, hopeful buyers in these areas will find fierce competition at private and public auctions. Investments in these regions will improve, but buying in will become difficult.

Combined with the cost-of-living crisis, locals in these areas are leaving in droves for more affordable housing.

Less Demand for Office Space, More Demand for Home Office

Post-pandemic work environments have changed rapidly, with various Scottish companies opting for hybrid and remote work styles. This shift has seen a massive decrease in the demand for large office spaces.